Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
Say what you want, but there is no exact science as to why some houses get snatched up right away – sometimes even higher than asking price – while others that seem reasonable, linger without any activity. There is no question that a big part of the equation is to work with a skilled and competent Real Estate Agent who will help inform, price, negotiate and navigate you through the entire sales transaction. However, in a competitive marketplace such as the one we are in presently, with the housing inventory levels where they are, and with continued low rates – what a buyer and seller can do to best structure the deal in advance, can help make or break a sale. (PS, if you do need the name of a few well-qualified Realtors, please do not hesitate to ask. I am often contacted for such insight, and pride myself on being a valuable resource to friends and clients to help put them in touch with the right professionals for their specific circumstances).
Beyond The “Pre-Approval”
Sellers should demand, and buyers should provide, as much of a “mortgage commitment” as possible in advance. This will give all parties involved the confidence that the financing will come through in an orderly and timely manner. By working with a lender who is able to give you a firm mortgage commitment/approval subject to only the property appraisal, everyone wins. A competent lender can fully approved a buyer for max financing leaving no question as to the prospect of getting a mortgage without issue. Get all the paperwork and qualification out of the way and get the confirmation to all parties to know this is a real deal!
With a standard purchase, there are many contingencies that a normal buyer would have as a default in their contract and offering. With the guidance of a competent and knowledgeable Attorney, Lender, or Real Estate professional a home buyer can consider removing some of the standard contingencies of the contract which would usually provide great benefit to the seller. The contingencies in most contracts are Home Inspection, Title and Lien searches, and Appraisal determination. The Appraisal/Value contingency, for example, is one where a buyer will only move forward with the purchase if the appraisal comes in at the same value of the purchase price (or greater). Working with a local lender can get an appraisal done in a matter of hours alleviating those concerns, and removing that from the contract altogether.
Very often the exact date of when a sale will “close” is determined when a contract is prepared by the Realtor, and sometimes updated during Attorney review. By honing in on a particular preference of a buyer or seller, and trying to accommodate their needs, can very much influence how one deal compares to another. Sometimes a lower offer will be accepted, if it suites the needs of a seller who would benefit from a specific schedule – or a higher offer can be obtained if a quick closing can be accommodated for a buyer who can lock-in a rate for a shorter duration. Working with an experienced lender can help navigate many of these circumstances to help maximize all parties in a delayed sale or rush transaction.
Knowing The Market
Part of navigating a competitive marketplace, is getting timely advice that helps one capitalize on the best circumstances possible. I am proud of the fact that in my article last week, I accurately predicted the important moves that the Federal Reserve would make, and the additional commentary to be aware of that would move interest rates thereafter. Insight such as that of interest rates movement – as just one example – helps distinguish one lender versus another and should be a major factor of consideration in anyone’s determination of mortgage financing.
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